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WorksheetsTVM
Total questions: 12
Worksheet time: 9mins
Compound interest is earned when interest paid in the first period is added to the principal, and this sum is multiplied by the interest rate to earn the new interest in the second period, which will then be added to the previous sum.
True
False
What does the Time Value of Money (TVM) principle state?
Money depreciates over time
Money has the same value regardless of when it is received or spent
Money has greater value when received sooner rather than later
Money has no value in the future
Which term represents the initial amount of money invested or borrowed?
Future Value
Present Value
Compound Amount
Accumulated Value
How does compounding frequency affect the Time Value of Money?
Higher compounding frequencies result in lower future values
Higher compounding frequencies result in higher future values
Compounding frequency has no effect on future value
It depends on the interest rate
Which technique in financial management enable us to take investment/expansion decisions?
Capital Structure
Ratio Analysis
Working Capital Management
Capital Budgeting
The key objective of financial management is ______.
Profit Maximization
Wealth Management
Asset Maximization
Sales Maxmization
Portion of Profit distributed to the shareholder is
Interest
Dividend
Tax
Earnings
The process of loan repayment by installment payments is classified as _________.
Amortizing a Loan
Depreciation of Loan
Appreciation of Loan
Appreciation of Investment
Calculate the present value of an ordinary annuity with annual payments of $5,000 for 10 years at an interest rate of 8%.
The present value of the annuity is $40,000.
The present value of the annuity is $30,000.
The present value of the annuity is $25,000.25
The present value of the annuity is $33,550.41
What is the formula for amount of annuity ?
S= R (i(1+i)n + 1)
S = R (i(1+r)n − 1)
S = R (r(1+r)n −1)
S = R (i(1+i)n −1)
What is Principal?
The original amount invested, separate from earnings
The same thing as interest
Money paid regularly at a particular rate for the use of money lent
The amount earned after interest
What is Time Value of Money
The idea that money available now is worth less than the same amount in the future
Mrs. Mullin's least favorite financial concept
The idea that money available now is worth more than the same amount in the future
The idea that you should take out loans in order to make investments
